Gabril Gagiano, a 54-year-old male, got retrenched and has been unemployed for six months. He received an

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Gabriël Gagiano, a 54-year-old male, got retrenched and has been unemployed for six months. He received an outplacement package and pension pay-out of R4 million, and an additional UIF subsidy of R7 500. He has R100 000 in savings from bonuses received in previous years, and residential property to the value of R2.5 million on which he owes nothing. Gabriël has no other debt and clean credit history. He has no other investments in addition to the above, except for moveable assets such as household items and two cars to the trade value of R200 000. Gabriël has a life policy to the current buy-out value of R500 000. Medical aid is secured. He worked for one government department in financial administration for his whole career, over 36 years. Gabriël has no entrepreneurial or business experience and only a few years of exposure to middle management in the public sector. Gabriël is married to Liz, who has been a homemaker since they got engaged. Gabriël and Liz have twins who hope to start tertiary education next year. They don’t know whether they will be able to afford university costs. This is creating some unneeded tension in the family. Gabriël is concerned about the future. He knows that the cost of living becomes more expensive year on year and that the value of money depreciates. Gabriël and Liz won’t be able to sustain their current standard of living without an additional income over and above interest earned on conventional investments. Gabriël is seriously contemplating starting a small-scale, relatively low-risk business, but he is nervous. He finds himself stuck, as though he cannot fuel his creativity. It is like a writer experiencing writer’s block. He is not able to generate ideas. Getting employment at his age, and with his experience and qualifications, is not an option for him.

QUESTION 1 [27 MARKS]

1.1 Define the term nascent entrepreneurship. Do you think Mr Gabriel can be regarded as a nascent entrepreneur? Motivate your answer. [4]

1.2. Describe the necessary entrepreneurial process steps that Gabriel needs to follow in his process to start a small-scale business. [12]

1.3. Which of the step do you think is the most critical element of the entrepreneurial process? [3]

1.4. With the aid of examples, briefly explain the SWOT analysis process to Mr Gabriel. [8] QUESTION 2 [23 MARKS]

2.1 Identify and explain the five characteristics of cultivating an entrepreneurial mindset he needs to develop his venture. [10]

2.2. Briefly discuss the seven key essential elements for embracing an entrepreneurial mindset. [7]

2.3. Mr Gabriel is nervous about starting a new business, as he fears failing to recover his investment. Advise him on the importance of following entrepreneurial factors before he starts his new business. [6]

i. Innovation ii. Commitment iii. Risk-taking ability